Editorial | Keep a lid on water, sewer bills

The Louisville Water Company Gatehouse at the Crescent Hill Reservoir in 2010.

If Ben Franklin had been living in Louisville in recent years, he might have been moved to add annual utility rate increases as the third certainty in this world, behind death and taxes.

Sure as another fiscal year rolls around, rates for such life essentials as safe drinking water and sanitary sewer services are outpacing inflation, while median household income in Louisville has not fully recovered from the recession. At $45,869 in 2012, it's still down from $46,670 in 2008 after bottoming out at $42,305 in 2010.

That's why it was refreshing to hear Mayor Greg Fischer urge the city-owned Louisville Water Co. to limit its next rate increase to the lower end of a proposal put forward by the water company's board last month.

The mayor has some leverage. He appoints the Board of Water Works, which has recommended a rate increase of between 3.75 percent and 5 percent to help pay for maintaining treatment facilities and water lines as consumers use less water. And his role of mayor places him on the board.

"My message to the water company consistently has been to not rely on automatic price increases to make its budget balance," the mayor said.

Keep the rate increase to less than 4 percent, he told the board. The company, Mr. Fischer said, can do that and still pay an annual, sizable dividend to the city - estimated at $20.2 million in 2014.

Now, the irony is not lost on us, or anyone else, that customers are essentially being rewarded for their use of low-flow shower heads and water-efficient toilets and rain barrels with rate hikes.

But to be fair, that's only part of the picture: Industrial water consumption now accounts for less than 10 percent, compared with 34 percent in 1977, with Louisville's shift away from manufacturing.

Still, many water company customers probably wish the mayor would push for an even smaller increase, under 3 percent, perhaps.

After all, Mr. Fischer is promoting a potentially useful change in state law allowing for temporary increases in sales tax to pay for special community needs, such as improved public transportation. Ever higher public utility rates threaten to gum up the politics there, and you can't ask people to pay too much at the same time.

Utility rate increases also don't happen in a vacuum. The city already has one of the highest tax burdens of 14 peer cities, according to a recent University of Louisville study.

So even a 3.75 percent to 4 percent rate hike can seem like a lot to customers who have seen their water rates rise between 3 percent and 4 percent each year for the last several years. That's especially true because the water bills also come packaged with Metropolitan Sewer District's ballooning charges. Those have generally been in the 6.5 percent per year range even as MSD borrows $100 million at a time to cover an important and court-required renovation of its leaky sewer system.

(MSD board members, who are also appointed by the mayor, said they were giving their customers a break this year by raising rates only 5.8 percent on Aug. 1).

It has actually come down to this: The combined MSD and Louisville Water bills that arrive once every two months are getting big enough that former water company executive director, Greg Heitzman, who now runs MSD, has talked about moving to monthly billing as a way to make each payment smaller.

Mr. Fischer has also instructed the water company and MSD to study a possible merger or other ways they can share costs to be more efficient and slow the pace of rate increases.

Just how all that works out is yet to be known, but the results of a "due diligence" study should be known soon.

Meanwhile, the bottom line is that the mayor and these two utilities need to do everything they can to become more efficient, and to justify any rate increases. And to be fully transparent about them.

The ratepayers deserve nothing less ... as they pay more and more.

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Editorial | Keep a lid on water, sewer bills

If Ben Franklin had been living in Louisville in recent years, he might have been moved to add annual utility rate increases as the third certainty in this world, behind death and taxes.